One thing we have going for us though is greed. If there is money to be made holding your wealth in Bitcoin then people will gravitate toward that option.

Had the exact same thought last night. If a new form of sound money is created from nothing, the potential for the largest transfer of wealth in possibility humanity's history will be so tremendous that human greed will have the strongest influence of all. It would only take a few senators on the right committees aligned to Bitcoin's speculative waves, to gum up state attempts to block Bitcoin. They would position themselves as the good guys, but it would really just be greed.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

interesting read thanks, I think the amount of new coins coming into the market will slow and i think his prediction that holders from the tops of April and December growth stages will start to sell has some validity.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

One thing we have going for us though is greed. If there is money to be made holding your wealth in Bitcoin then people will gravitate toward that option.

Had the exact same thought last night. If a new form of sound money is created from nothing, the potential for the largest transfer of wealth in possibility humanity's history will be so tremendous that human greed will have the strongest influence of all. It would only take a few senators on the right committees aligned to Bitcoin's speculative waves, to gum up state attempts to block Bitcoin. They would position themselves as the good guys, but it would really just be greed.

I don't understand the fear of alts. I'm into Bitcoin because it's better money, in our history it's the best yet. Competition is what will make it better. Alts can out innovate Bitcoin on every metric except one, the Network Effect, and this is what makes it useful as a SoV.

I think this significantly underestimates the threat of alt coins and why Bitcoin is not a given (I'm saying this as someone who believes/hopes in the project)

For example what if the US government created a USDollarCoin that:1) has all of the benefits of programmable money, you can have your own wallet and spend it through computing devices2) has the _perceived_ benefits of centralized control including the ability to "recover" lost coins and "reverse fraudulent" transactions (possibility a majority of people prefer this based on Bitcoin's detractors' views). This could be accomplished with forced use of multisig where the FED has co-control.3) has significantly easier tax implications to deal with (meaning no tax implications) compared to bitcoin where EVERY transaction is a taxable event4) launches with mass adoption through automatic bank account conversion5) was legislated as the only legal currency

Maybe that doesn't scare you, but it scares me.

The first wave of alts were simple clones, it was almost a given that network effects would hold them back here. However the next wave of alts are going toa) come with real innovations and thenb) come with government sanctioned force

I'm not saying this will happend, and it may seem far fetched today, but it is in the realm of possibilities. The US government lives off of the inflation tax and if Bitcoin ever becomes a real threat, the state will definitely try more and more attempts to maintain control of the money supply. It's possible the proposal above would be a last ditch attempt to save itself.

This is basically where I see Bitcoin going. The coin itself will be (more or less) irrelevant, but the technology (or something like it) will play center stage. The U.S. government isn't concerned about Bitcoin as a threat to the dollar. The IRS has already made it impossible to use as a traditional currency without running afoul of tax code. Report capital gains on every transaction? Yeah right. They knew exactly what they were doing .. marginalizing Bitcoin. Digital currency has been here ever since banks established electronic lines of intrabank credit. This technology will likely be adopted in some form by governments, with their own strings attached (100% oversight). People will go along with it. Middle/upper class Americans simply don't have the stomach for dissent. They've too much to lose. Credit cards work fine for now, and when the time comes, a shift will be made to something a bit more streamlined, all the big players will be right there at the trough, make no mistake.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

The problem I see with gold is also a technological one.

Even if gold had survived these government interventions, there is no way people would be using it as a currency in our modern world. Gold's physical nature is one of its more important flaw because it leads to inherent counterparty risk if we are to use it as the reserve currency.

It is the very reason why banks were able to centralize gold holdings to then issue paper notes which they later devalued through fractional reserve

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010

I don't understand the fear of alts. I'm into Bitcoin because it's better money, in our history it's the best yet. Competition is what will make it better. Alts can out innovate Bitcoin on every metric except one, the Network Effect, and this is what makes it useful as a SoV.

I think this significantly underestimates the threat of alt coins and why Bitcoin is not a given (I'm saying this as someone who believes/hopes in the project)

For example what if the US government created a USDollarCoin that:1) has all of the benefits of programmable money, you can have your own wallet and spend it through computing devices2) has the _perceived_ benefits of centralized control including the ability to "recover" lost coins and "reverse fraudulent" transactions (possibility a majority of people prefer this based on Bitcoin's detractors' views). This could be accomplished with forced use of multisig where the FED has co-control.3) has significantly easier tax implications to deal with (meaning no tax implications) compared to bitcoin where EVERY transaction is a taxable event4) launches with mass adoption through automatic bank account conversion5) was legislated as the only legal currency

Maybe that doesn't scare you, but it scares me.

The first wave of alts were simple clones, it was almost a given that network effects would hold them back here. However the next wave of alts are going toa) come with real innovations and thenb) come with government sanctioned force

I'm not saying this will happend, and it may seem far fetched today, but it is in the realm of possibilities. The US government lives off of the inflation tax and if Bitcoin ever becomes a real threat, the state will definitely try more and more attempts to maintain control of the money supply. It's possible the proposal above would be a last ditch attempt to save itself.

This is basically where I see Bitcoin going. The coin itself will be (more or less) irrelevant, but the technology (or something like it) will play center stage. The U.S. government isn't concerned about Bitcoin as a threat to the dollar. The IRS has already made it impossible to use as a traditional currency without running afoul of tax code. Report capital gains on every transaction? Yeah right. They knew exactly what they were doing .. marginalizing Bitcoin. Digital currency has been here ever since banks established electronic lines of intrabank credit. This technology will likely be adopted in some form by governments, with their own strings attached (100% oversight). People will go along with it. Middle/upper class Americans simply don't have the stomach for dissent. They've too much to lose. Credit cards work fine for now, and when the time comes, a shift will be made to something a bit more streamlined, all the big players will be right there at the trough, make no mistake.

You just found yourself a lot of enemies here with that statement

Technology solves problems. Bitcoin is digital. Soon my hot wallet is gonna do all of the accounting for me and I should have no problem reporting and conforming with the tax code.

That's absolutely not a problem.

As we've been saying, maybe it is true that middle/upper class Americans don't have the stomach for dissent when there is nothing tangible or immediate to gain but if there is money to be made then greed overcomes fear almost everytime.

As for governements adopting the technology, this gentleman here pretty much nails it :

Let's be clear here. Taking the existing banking system, add in lower fees and faster transactions, is nothing like bitcoin. It's just the same old shit, but not quite as stuck in the dark ages as it is now.

The concept of a government-controlled blockchain is complete nonsense. Those two things are mutually exclusive, as soon as a central authority has control of the blockchain, the entire thing becomes a waste of resources. You'd get the same effect from the government just running a centralized database, except it's much more efficient.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

Yes, they will fight tooth and nail. The question is what are their viable strategies?

Passing a law saying "you may not accept bitcoin as payment, under penalty of 10 year prison sentence", would pretty much destroy bitcoin in that country. There's no ecosystem when no law-abiding person can use it at all.

However that's not the end of the story, other countries' bitcoin economy would continue to flourish at the expense of the iron-fist country. It's possible that pressure might open things back up. I think the equilibrium is where some fraction of the people use bitcoin, and the rest won't be bothered due to regulations and simple lack of demand. The drug war is similar - drug policy doesn't really stop anyone from smoking a joint, but you have to want it a little more, compared to it being freely available on every corner. The government just selectively enforces the law for their benefit (disproportionately on minorities). Same will happen with bitcoin. They'll just create a multi-billion-dollar governmental department just for enforcing "bitcoin crime".

I think the "hyperbitcoinization" scenario is sheer fantasy. The vast majority of the population do as they are told, if the tv says bitcoin is for terrorists, they will not be interested. Only when those people die off and are replaced by bitcoin-savvy youth, might there be a chance for a takeover.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

Yes, they will fight tooth and nail. The question is what are their viable strategies?

Passing a law saying "you may not accept bitcoin as payment, under penalty of 10 year prison sentence", would pretty much destroy bitcoin in that country. There's no ecosystem when no law-abiding person can use it at all.

However that's not the end of the story, other countries' bitcoin economy would continue to flourish at the expense of the iron-fist country. It's possible that pressure might open things back up. I think the equilibrium is where some fraction of the people use bitcoin, and the rest won't be bothered due to regulations and simple lack of demand. The drug war is similar - drug policy doesn't really stop anyone from smoking a joint, but you have to want it a little more, compared to it being freely available on every corner. The government just selectively enforces the law for their benefit (disproportionately on minorities). Same will happen with bitcoin. They'll just create a multi-billion-dollar governmental department just for enforcing "bitcoin crime".

I think the "hyperbitcoinization" scenario is sheer fantasy. The vast majority of the population do as they are told, if the tv says bitcoin is for terrorists, they will not be interested. Only when those people die off and are replaced by bitcoin-savvy youth, might there be a chance for a takeover.

If the TV says Bitcoin is for terrorists but both my friends & neighbors use it and have doubled their wealth in the span of a year then I might just consider it.

Greed

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010

This makes it clear that we must be careful to distinguish between the ledger (a conceptual spreadsheet keeping track of who owns what percentage of the economic community known as "the Bitcoin ecosystem" and later perhaps just "the global economy") and the protocol for updating that ledger.

We're back to this silly idea of separating the currency from from the blockchain. You can't, they are one in the same.

This "ledger" rhetoric is a paraphrase of the false idea they are separable.

The system is the blockchain is the currency is the protocol is the ledger.

once again, this is why we need to continue focus on what has got us here, Bitcoin as Sound Money. b/c one day, the sharks will be coming not for your stocks, bonds, or insurance contracts, but your money:

All this fancy footwork is to prevent a run on the TBTF banks, in order to keep their derivatives casino going with our money. Warren Buffett called derivatives “weapons of financial mass destruction,” and many commentators warn that they are a time bomb waiting to explode. When that happens, our deposits, our pensions, and our public investment funds will all be subject to confiscation in a “bail in.” Perhaps it is time to pull our money out of Wall Street and set up our own banks – banks that will serve the people because they are owned by the people.

Unlike coins and paper bills, which cannot be written down or given a “haircut,” says Napier, deposits are now “just part of commercial banks’ capital structure.” That means they can be “bailed in” or confiscated to save the megabanks from derivative bets gone wrong.

Rather than reining in the massive and risky derivatives casino, the new rules prioritize the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds.

“Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors.

Sometimes I seriously consider simply closing every single dollar account and going all in on bitcoin and fully exiting the dollar system. Revolutions have started over less. Even if it all goes to zero at least it was the good fight.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

This is basically where I see Bitcoin going. The coin itself will be (more or less) irrelevant, but the technology (or something like it) will play center stage. The U.S. government isn't concerned about Bitcoin as a threat to the dollar. The IRS has already made it impossible to use as a traditional currency without running afoul of tax code. Report capital gains on every transaction? Yeah right. They knew exactly what they were doing .. marginalizing Bitcoin. Digital currency has been here ever since banks established electronic lines of intrabank credit. This technology will likely be adopted in some form by governments, with their own strings attached (100% oversight). People will go along with it. Middle/upper class Americans simply don't have the stomach for dissent. They've too much to lose. Credit cards work fine for now, and when the time comes, a shift will be made to something a bit more streamlined, all the big players will be right there at the trough, make no mistake.

The tax code is a such a serious barrier to adoption now. Remember the FEDs finally brought down the mob not by convicting on actual crimes, but convicting on tax evasion. The Bitcoin tax rules will be so hard to follow it will function as a trap for most people.

If the TV says Bitcoin is for terrorists but both my friends & neighbors use it and have doubled their wealth in the span of a year then I might just consider it.

Greed

We are 100% in agreement on the greed factor, but what if the scenario plays out as:

"The TV says Bitcoin is for terrorists and both my friends & neighbors were dragged into court over tax evasion, one got off but lost his house and the other went to jail." Would kinda dampen the greed factor.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

Harder to do that now with 99% of Americans on Social Media

Most twitter comments don't focus on concepts for money. Most seem to be about Kim Kardashian and pictures of dinner.

I fully agree with you that social media should help with education, I'm just trying to point out it is still extremely difficult, maybe we can cross the education hurdle this time, but maybe not.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

Harder to do that now with 99% of Americans on Social Media

Most twitter comments don't focus on concepts for money. Most seem to be about Kim Kardashian and pictures of dinner.

I fully agree with you that social media should help with education, I'm just trying to point out it is still extremely difficult, maybe we can cross the education hurdle this time, but maybe not.

Trying to educate people in technical stuff is worthless. Bitcoin will be a success when the kardashians use it to buy dinner and tweet about it. Then maybe, maybe we will be rich with our current smalltime wallets.

the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.

Could not disagree with this more.

Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.

In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.

Yes, they will fight tooth and nail. The question is what are their viable strategies?

Passing a law saying "you may not accept bitcoin as payment, under penalty of 10 year prison sentence", would pretty much destroy bitcoin in that country. There's no ecosystem when no law-abiding person can use it at all.

However that's not the end of the story, other countries' bitcoin economy would continue to flourish at the expense of the iron-fist country. It's possible that pressure might open things back up. I think the equilibrium is where some fraction of the people use bitcoin, and the rest won't be bothered due to regulations and simple lack of demand. The drug war is similar - drug policy doesn't really stop anyone from smoking a joint, but you have to want it a little more, compared to it being freely available on every corner. The government just selectively enforces the law for their benefit (disproportionately on minorities). Same will happen with bitcoin. They'll just create a multi-billion-dollar governmental department just for enforcing "bitcoin crime".

I think the "hyperbitcoinization" scenario is sheer fantasy. The vast majority of the population do as they are told, if the tv says bitcoin is for terrorists, they will not be interested. Only when those people die off and are replaced by bitcoin-savvy youth, might there be a chance for a takeover.

If the TV says Bitcoin is for terrorists but both my friends & neighbors use it and have doubled their wealth in the span of a year then I might just consider it.

Greed

On top of this, I think the fact that the majority of economies worldwide are in the toilet at least gives bitcoin a chance to be heard. Jobs, growth, efficiencies....votes?

This makes it clear that we must be careful to distinguish between the ledger (a conceptual spreadsheet keeping track of who owns what percentage of the economic community known as "the Bitcoin ecosystem" and later perhaps just "the global economy") and the protocol for updating that ledger.

We're back to this silly idea of separating the currency from from the blockchain. You can't, they are one in the same.

This "ledger" rhetoric is a paraphrase of the false idea they are separable.

The system is the blockchain is the currency is the protocol is the ledger.

Yes you could. Not to say the currency can run without a blockchain. Of course it can't.

But you did not address the essence of ZB's argument which is that monoculture in currency is absolutely desirable. We don't want multiple ledgers of ownership where different, conflicting stakes are attributed to the same persons.

This ledger cannot "economically" fail, only the protocol updating it. If that happens, we could still "transfer" a picture of the ledger (who owns what) to a new protocol that will update it. So yes, if the blockchain fail, we could, theoretically, seperate the currency (ledger) and "attach" it to a new chain.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010